German socks and underwear brand Snocks sells minority stake to Cathay Capital

German start-up Snocks, based in Mannheim, south of Frankfurt, has sold a minority stake to private equity firm Cathay Capital, with a view to accelerating the international expansion of its socks and underwear business. Cathay Capital is investing a significant amount, estimated in the tens of millions of euro, in the apparel brand founded by cousins Johannes Kliesch and Felix Bauer in 2016. The two founders retain a majority stake in the company, and will continue to control Snocks’s business operations.

Only a few weeks ago, Snocks made the headlines when it reported a record revenue of €32 million in fiscal 2021. Kliesch and Bauer have now announced they have sold a stake to Cathay Capital in a deal worth several million euro.
Snocks, which until now had self-financed its expansion, took this decision in order to be able to accelerate its growth and internationalisation plans. Kliesch said that the brand “[wants] to expand its business in France this year, and open an office in Paris. We expect to achieve a revenue of approximately €1 million there, much more than we currently generate.” France will serve as a test ahead of further expansion in other western European countries like Spain, Italy and Scandinavia.

Snocks's is an online-only business, and the brand is keen to invest more in its image, not only on the web, but also by staging in-person events to broaden its community. “We believe that our essentials collections appeal to almost all target groups, and that there is still great potential to be tapped on our main market, but also on foreign markets. To make the most of it, we are also going to invest heavily in our inventory, so that we can always be ready to deliver,” added Kliesch. In addition, the founders plan to invest part of the capital in extending the Snocks product range, for example by buying outright or acquiring stakes in other companies.

“Ultimately, what convinced us that Cathay Capital is the right partner for our next growth phase is the firm's experience and the fact that it is open to a global ecosystem,” said Bauer. For Kliesch and Bauer, Cathay Capital’s global footprint and local expertise, deeply rooted in Europe, Asia and North America, are both key factors. The investment firm was first set up in France in 2007, in the country where Snocks plans to establish a foothold in the coming months. “In addition, we intend to share sourcing know-how in Asia, where the main production sites for Snocks products are located," said Bauer.

Cathay Capital is a global investment firm operating in a variety of sectors, including consumer goods, corporate transformation and healthcare. It has a strong track record in assisting consumer brands like Juliette Has a Gun and Moose Knuckles. Cathay Capital has been active in Germany since 2015, and its German team has already invested in a number of industries. Snocks will be the firm's first investment in a digital native brand in Germany.

“We are delighted to help Snocks expand internationally and continue its impressive organic growth,” said Fabien Wesse, managing partner at Cathay Capital. He added that “[Snocks] has a unique business model and a strong team, which has demonstrated its expertise in online marketing and sales over the past few years. We are confident that our experience in the international deployment of consumer brands will make us a strong partner for Snocks, and will allow us to help extend its remarkable success.”